As companies move from paper to digital, their treasury teams must mitigate any risks that could emerge as a result of the migration. The following actions will help safeguard a treasury organization against new fraud vectors that the transition might expose it to:

Revise policies and procedures for all tender types within the organization. The same activities can reduce the incidence of successful fraud across checks, wire transfers, and ACH and card payments. These activities include dual initiation or approval, validating exceptions and returns, reviewing and verifying change of payment instructions, and implementing call backs. Daily review and reconciliation—accompanied by a complete reconciliation conducted monthly, at a minimum—are strongly recommended.
Work with accounts payable (A/P) to make sure they have all the appropriate protections in place for the company's banking tools. Some A/P team members may be susceptible to BEC fraud attempts. Thus, it's important to have safeguards in place to mitigate fraud at the account level—tools such as ACH filters, payee positive pay, and check blocks.
Validate procedures with internal audit to gain an independent perspective and detect and address any deficiencies immediately. Standard operating procedures should ensure that payments are initiated, released, and validated—and that returns or exceptions are reviewed and reconciled—all per company policy. Any shortcomings in the process need to be identified, and adjustments must be implemented, to alleviate the risk of fraud.
Reconcile all types of payments on a daily basis.
Return ACH items within return windows.

The decline in overall payments fraud may very well be attributed to vigilant finance professionals who are actively implementing strategies that prevent their organizations from being vulnerable targets. In addition, the pandemic likely induced changes in the way operations and processes are being conducted, resulting in the obstruction of some fraud activity. Companies sought to patch up deficiencies in their controls, policies, and procedures, as well as provide education efforts to equip their staff to be better prepared to detect risk.

Instant Insights /

Effort and Vigilance Pay off in the Battle Against Payments Fraud

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